Investors throw weight behind “protein bubble” initiative

Walmart, Tesco and Nestle are among 16 food companies targeted by a coalition of 40 institutional investors engaging with them on the risks posed by industrial animal food production and opportunities around plant-based sources of protein.
The $1.25trn investor coalition includes Swedish state pension funds AP2, AP3 and AP4, Aviva Investors and Robeco, who have been coalesced by the Farm Animal Investment Risk & Return Initiative (FAIRR) and NGO ShareAction.
The investors are responding to a recent Oxford University study, which calculated that if global diets reduced their reliance on meat it could lead to healthcare-related savings and avoided climate damages of $1.5 trillion by 2050. The report also points to regulatory trends as a driver for corporate action – such as Denmark’s consultation on the introduction of red meat tax and the Chinese government’s plan to reduce its citizens’ meat consumption by 50%.
Peter van der Werf, Engagement Specialist at Robeco said: “The growing demand for meat will put large pressure on natural resources in the coming decades. Robeco identified this as a financial material topic and engages to improve sustainability in the meat supply chain. Protein diversification is an important instrument to that end. Companies at the end of the meat supply chain have an important role to play towards customers and we will encourage them to make protein diversification an integral part of their strategy.”
To accompany the launch of the engagement campaign, FAIRR Initiative and ShareAction have launched a new briefing entitled ‘The Future of food – the investment case for a protein shake up’. The briefing highlights the risks associated with the growing global demand for protein and an over-reliance on factory farming of livestock for its supply. It warns that the environmental, social and public health risks inherent in this model are not valued appropriately in financial markets. The briefing also flags up opportunities around moving into plant-based sources of protein, arguing that consumers are increasingly cutting back on heavy meat-based diets. It points to General Mills – makers of Häagen Dazs ice cream and Yoplait yoghurt – as an example of good practice for supporting start-up companies such as Beyond Meat, which is developing foods to substitute meat products with more sustainable, plant-based alternatives.US food giant General Mills, which holds its AGM in Minneapolis tomorrow, is part of the investors engagement drive.
Jeremy Coller, Founder of the FAIRR Initiative and Chief Investment Officer of Coller Capital, said: “The world’s over-reliance on factory farmed livestock to feed the growing global demand for protein is a recipe for a financial, social and environmental crisis. Intensive livestock production already has levels of emissions and pollution that are too high, and standards of safety and welfare that are too low. It simply can’t cope with the projected increase in global protein demand. Investors want to know if major food companies have a strategy to avoid this protein bubble and to profit from a plant-based protein market set to grow by 8.4% annually over the next five years.”
The 16 companies written to by investors are: General Mills, Kraft Heinz, Mondelez International, Nestlé SA, Unilever, Ahold-Delhaize, The Co-operative Group, Costco Wholesale Corporation, Kroger Company, Marks & Spencer, Wm Morrison Supermarkets, Ocado, Sainsbury’s, Tesco, Walmart, Whole Foods Market. The letters were sent on Friday 23 September.
Investors signing the letters included: ACTIAM, Active Earth Investment Management, AP2, AP3, AP4, Australian Ethical Investment, Aviva Investors, Barrow Cadbury Trust, Boston Common Asset Management, Bridges Ventures, Christian Super, Clean Yield Asset Management, Coller Capital, Congregation of Sisters of St. Agnes, Dana Investment Advisors, Dignity Health, Folksam, Franciscan Sisters of Perpetual Adoration, Impax Asset Management, Jeremy Coller Foundation, Joseph Rowntree Charitable Trust, JMG Foundation, Lankelly Chase Foundation, Menhaden Capital, Mirova, New Crop Capital, Nordea Asset Management, Pax World, Robeco Asset Management, Sonen Capital, Swift Foundation, Tellus Mater, The Sustainability Group at Loring, Wolcott & Coolidge Trust, Trillium Asset Management, Triodos Bank, Unitarian Universalist Congregation at Shelter Rock, Walden Asset Management, Zevin Asset Management.